Is Kenneth Dam working for Elliott Associates?

By Felix Salmon
May 13, 2012

Kenneth Dam is an unusually reticent professor. Since he released his amicus brief in the case of Elliott vs. Argentina, I’ve phoned him and sent him multiple emails to two different addresses, but have received no reply at all. Which is odd, because he clearly feels very strongly about the case — strongly enough to enlist Kevin Reed, of the white-shoe law firm Quinn Emanuel Urquhart & Sullivan, to put together his brief and submit it to the Second Circuit.

Such services don’t come cheap: my guess is that Reed charged Dam well into six figures for his services.

So why would Dam spend hundreds of thousands of dollars to submit an amicus brief in this case, yet at the same time evince no interest in talking to the press about it? He hasn’t returned Bloomberg’s calls, either, and neither is he quoted in Michelle Celarier’s story in the NY Post. But Celarier has managed to come out and say what many of us suspected, when we first saw the brief:

Elliott Capital Management’s Paul Singer must be sweating it…

Singer has enlisted the support of ex-Treasury vet Kenneth Dam, who served under Ronald Reagan and was deputy secretary of the Treasury under George W. Bush, to write a “friends of the court” brief for Elliott in a case the US Court of Appeals for the Second Circuit is slated to hear later this month.

This wouldn’t be the first time that Elliott paid a venerable law professor to submit a brief in support of its case. But in this particular brief, there’s an unambiguous footnote:

Pursuant to Local Rule 29.1, Kenneth W. Dam states that he authored this brief and that it was not authored or funded by any party to this action.

On the off chance that you’re not familiar with Local Rule 29.1, it requires a disclosure statement under FRAP 29(c)(5), which in turn says that this footnote must indicate whether “a person — other than the amicus curiae, its members, or its counsel — contributed money that was intended to fund preparing or submitting the brief and, if so, identifies each such person”. Since Dam identifies no such person, I would normally conclude that he paid the costs of preparing and submitting this brief himself.

But Michelle Celarier is a veteran and very well-sourced journalist, and if she says that Dam’s brief was commissioned by Elliott, I’m inclined to believe her.

It’s all very peculiar. Within the brief itself, Dam’s only declared interest is this:

Prof. Dam has a substantial interest in the outcome of this action because it presents issues involving the international financial markets, the role of international financial institutions, and U.S. international policymaking that he has written on and studied extensively.

Which might explain why he’s interested in the outcome of the action, but doesn’t come close to explaining why he’s willing to spend a very large amount of money attempting to influence the outcome of the action.

All of this could be cleared up, of course, very easily, if only Dam or Elliott were willing to answer some simple questions. But instead we get this:

Dam didn’t return a phone message and e-mail sent to his law school office seeking comment on the filing. Peter Truell, a spokesman for New York-based Elliott Management, declined to comment.

I first tried to ask Dam about this back on May 2, and then tried again on May 7. So far, I’ve heard nothing. So if anybody out there knows Ken Dam, and gets the opportunity to ask him a simple question, I’d be much obliged if you could ask him whether he’s working for Elliott. Then, if he says yes, ask him why he didn’t say so in his brief. And if he says no, ask him how much it cost to file this brief, and whether he personally paid the full sum. I’d be fascinated to learn what his answers are.

More From Felix Salmon
Post Felix
The Piketty pessimist
The most expensive lottery ticket in the world
The problems of HFT, Joe Stiglitz edition
Private equity math, Nuveen edition
Five explanations for Greece’s bond yield
Comments
7 comments so far

1.) I’d be surprised if an amicus brief cost in the six figures.

2.) Commissioned=/=paid for. Quite possible–and much more likely–Elliott just asked Dam to file a brief on their side. Nothing in the Post story you linked says otherwise.

3.) Pick a SCOTUS case at random and you’ll see all sorts of amicus briefs. Many have similar boilerplate asserted interests.

Posted by jaherman | Report as abusive

I am really confused by this post. Kevin Reed represents Elliot Assoc. in the case. The way these things usually work, the lawyers solicit amicus briefs that would help out their clients. Why would you assume that it was Kenneth Dam that sought out Reed, and why would you assume that Reed would bill Dam for filing the brief when it was Reed’s own client that would benefit from the brief?

Moreover Nothing in Celarier’s story says that anybody paid Dam to write the brief; it simply says that Elliot enlisted his support. Why do you assume that money must have changed hands?

Posted by slowlearner | Report as abusive

I suspect that Kenneth Dam is a wealthy man. Among other things, he served on a board of directors of Alcoa for 15 years. In addition, as a law professor, he could have done much of the drafting on his own, only hiring Reed to polish the rough edges. It wouldn’t be as much of a burden on him as you say.

As the comment above says, Dam may have been asked by Elliott to file a brief, and some form of quid pro quo was implied (or not), and something was worked out between Dam, Elliott, and Reed to avoid money explicitly changing hands. Reed’s page at Quinn Emanuel admits that Elliott is one of his regular clients.

Posted by Nameless | Report as abusive

This post is surprisingly ill-informed (and/or malicious)for an author of your caliber, Felix. Slowlearner got it right. There’s nothing to see here, and certainly nothing that should call into question the good professor’s integrity.

Posted by amateurediteur | Report as abusive

Thin ice here, FS – you’ve as much as accused Dam of a serious offense – something even worse than neglecting to return your calls.

Posted by MrRFox | Report as abusive

When drafting required disclosures, lawyers are generally careful to follow the required language verbatim if they can. Perhaps Dam’s reference to “any party” rather than the rule’s “person” was unintentional, but it’s odd.

Posted by Blox | Report as abusive

” Which is odd, because he clearly feels very strongly about the case — strongly enough to enlist Kevin Reed, of the white-shoe law firm Quinn Emanuel Urquhart & Sullivan, to PUT TOGETHER his brief and submit it to the Second Circuit.”

“Pursuant to Local Rule 29.1, Kenneth W. Dam states that he AUTHORED this brief and that it was not AUTHORED or funded by any party to this action.”

So I’m a little confused here. It seems that Dam is very clearly stating that neither Kevin Reed (nor anyone else) wrote the brief. So what do you believe Kevin Reed did that you believe cost a six-figure sum? Regardless of how rapacious lawyers are, I can’t believe the simple act of filing the paperwork (and perhaps reading the brief to make sure there is nothing embarrassing therein) would cost a six figure sum, and no matter how much it cost, if it is true that Reed represents Elliot, then he filed that paperwork as just one of those services for which he is being paid by Elliot.

So it seems more like the cost here is the time spent by Dam in researching and writing the brief. Why would he spend this time? Well, the fact is people do crazy stuff like this constantly. Once someone buys into a particular view of the world, whether it’s economics, politics, or the law, they’re frequently willing to spend insane amounts of time to convert others to their cause. This strikes me as absolutely no different from, to take an obvious example, some of the commenters who stalk your pages and respond, sometimes extremely prolix, to your points.

Posted by handleym | Report as abusive
Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/